In the ABCs of 1988's tax reform effort in Utah, Initiative C has been at the bottom of the list in more ways than one.

The initiative, which would provide a tax credit to parents who have children in private schools, has consistently had less support in the polls and has generally received less attention because it addresses an issue of major concern to fewer people. The constitutionality of the initiative has already been challenged and it would face an immediate court contest should it pass."C gets pulled into the debate on tax limitation, even though it isn't the same thing," said Sen. William T. Barton, R-Salt Lake, who has been pushing for a private education tax credit in the Legislature for several years. "It might have done better on its own."

The initiative on the Nov. 8 ballot would allow parents who have children in private schools to receive a tax credit, not to exceed half the amount the state is spending per pupil through its equalized education program. At this point, the credits would amount to $602 for a child in grades kindergarten through sixth grade and $722 for students in grades 7-12.

"Its advantage is that it would lighten the load on public education and help us stretch the dollars we do have," said Barton, R-Salt Lake.

The proponents' assumption is that a tax credit would encourage more par ents to put their children in private schools. Eventually, the public system would be relieved of the education of enough children to achieve a savings, he said.

That break-even point would occur when approximately 2,700 more children had been switched from public to private schools, he said. The number of students now enrolled in private schools in Utah is estimated at 5,500. The state saves approximately $13 million annually because it does not pay for the education of these children.

Utah has the smallest proportion of its students in private schools _ 1.3 percent, compared with 13 percent nationally. If the state were to come up to even half the national average, an estimated $30 million would be freed up for public education each year, Barton said.

The state's initial costs of allowing the tax credit are estimated at $3.5 million to $6.4 million - money that would stay with the families of private school students for tuition and not go into the common educational pot.

The spread in estimates reflects one of the problems with the bill. It is unclear who would receive the credit - just those parents who have children in recognized private schools or parents who choose to educate their children at home in informal schools.

Barton said the initiative specifies that the money must be paid "to others," discouraging abuse of the credit by parents who would take their children out of public schools and set up a home school just to get the tax benefit.

However, Sen. Frances Farley, D-Salt Lake, sees the tax break as a potential impetus for some parents to bypass the intent of the initiative and pull their children out of schools and put them into home schools. Parents of such students could pay each other and ostensibly meet the requirement.

She sees the initiative as opening the way to erosion of the public school system.

Utah has little precedent nationally as a pattern for private school tax credits.

Only Minnesota has a tuition tax program that has escaped court challenges. The tax break in that state is extended to all parents, not just those with children in private schools, avoiding the constitutional questions. There tax credits did not prompt growth in private schools. Their enrollment, in fact, declined to a small extent after passage of the bill.

Private schools also tend to increase tuition commensurate with what officials believe is the parents' ability to pay, the report says.

At least 13 state legislatures have attempted to institute tuition tax credits only to see them overturned by courts. The prime concern is for separation of church and state. The great majority of private schools, including those in Utah, are sponsored by religious organizations.

Sen. Haven J. Barlow, R-Layton, who wrote the rebuttal against Initiative C in the state's voter information pamphlet, raised a second question about the proposal, pointing out that parents whose private school tuitions are less than the tax credit allowed could get a cash payment. The state would be subsidizing these parents for choosing to send their children to private schools, he said.

The American Civil Liberties Union has threatened an immediate challenge of Initiative C if it passes in November. While no one could estimate in advance what court costs would be, the state spent more than $550,000 for litigation of cable television issues.

Sister Joan Allem, superintendent of the Catholic school system in Utah, said the church supports the concept of tax credits for private schools and has taken a position in favor of Initiative C. However, she said, she is concerned with the weaknesses in the initiative.

"It does not include enough rationale to make it understandable," she said. "In the future, we need some kind of proposition that would address the needs of ALL school age children," - to give them a better chance to select among educational options.

The church also is concerned with potential strings the state might attach to education in the parochial schools in return for the tax break. "We must be able to operate under our own concept of education," Sister Joan said.

Parents pay tuition fees ranging from $675 to $2,800, depending on the educational level and the ability of the parents to pay, Sister Joan said.

Those facts, in the Catholic schools at least, counter arguments that private schools promote an elitist system in which the rich pull the "cream" of students from the public system, leaving it to deal with less academically able students, she said.